Sat, Oct 22, 2016 - Page 10 News List

SkyCity shares plunge on China high-roller warning

AFP, WELLINGTON

Shares in New Zealand’s SkyCity gaming group yesterday slumped 12 percent after it warned China’s crackdown on high-roller promotions would affect its bottom line.

The company, which runs the flagship SkyCity casino in Auckland, New Zealand, said about 50 percent of its turnover came from Chinese customers.

SkyCity said it was closely monitoring the detention in China of about 18 marketing staff from rival Australian casino operator Crown Resorts Ltd.

“[The] financial impact of this situation remains uncertain, but it is likely to be adverse over the short-to-medium term,” a trading update said.

Gaming companies are not allowed to explicitly advertise gambling in China and Beijing reportedly suspects the Crown staff of promoting the casino to high rollers.

SkyCity said it had no office or employees in China, but sometimes engaged independent contractors to manage customer relationships.

“SkyCity is confident that its contractors comply with all relevant laws and regulations in China,” it said. “None of SkyCity’s contractors have been questioned or detained as part of this investigation.”

Graft is endemic in China and Chinese President Xi Jinping (習近平) launched a much-publicized drive against corruption after he came to power in 2012.

One strategy has been to target high rollers who use foreign casinos to move funds out of China.

SkyCity expects the crackdown to reduce the number of big spenders at its casinos.

“We expect international business turnover to weaken further following recent events in China,” interim chief executive John Mortensen said.

SkyCity shares fell 11.94 percent to NZ$3.76 yesterday.

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